Renters insurance provides important financial protection for your personal belongings and liability coverage in case someone is injured at your rental property. But how much is renters insurance cost on average?
The price you’ll pay can vary based on factors like your location, amount of coverage and deductible. By understanding these cost factors, shopping around for quotes, and looking for available discounts, you can find affordable renters insurance to fit your budget.
What Does Renters Insurance Cover?
A standard renters insurance policy includes several types of coverage:
- Personal property – Pays to repair or replace your belongings if they are stolen or damaged by a covered peril like fire or vandalism. You choose a coverage limit.
- Liability – Covers injuries or property damage you’re legally responsible for. Pays for legal fees if you’re sued.
- Loss of use – Reimburses hotel or restaurant costs if you can’t live in your rental temporarily after a covered loss.
- Medical payments – Covers minor medical bills for guests hurt at your home, regardless of fault.
Renters insurance protects your personal belongings and provides liability protection in case someone slips and falls or is injured at your rental. It’s a relatively inexpensive way to safeguard your finances.
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Average Cost of Renters Insurance
The nationwide average cost for a renters insurance policy is around $15 per month or $180 per year, according to data from the National Association of Insurance Commissioners (NAIC). However, your individual rate will depend on several factors.
The amount of personal property coverage you buy is a major cost factor. Below are average annual renters insurance rates based on different coverage limits:
- $15,000 in personal property coverage – $170 per year
- $30,000 in personal property coverage – $220 per year
- $50,000 in personal property coverage – $300 per year
Where you live also significantly impacts price. Renters insurance costs more in areas prone to risks like crime, extreme weather and wildfires. Here are average annual rates for renters insurance by state:
| State | Average Yearly Rate |
| Alabama | $180 |
| Alaska | $100 |
| Arizona | $170 |
| Arkansas | $225 |
| California | $180 |
| Colorado | $130 |
| Connecticut | $150 |
| Delaware | $150 |
In general, Louisiana, Oklahoma, Mississippi, Arkansas, and Texas have the highest renters insurance rates, while Wisconsin, Iowa, Idaho, and Oregon have the lowest.
Factors That Determine Cost
These factors have the biggest impact on renters insurance rates:
Location
If you live in an area with high crime or natural disaster risk, you’ll pay more than in low-risk regions. Rates are also higher in urban areas than in rural zip codes.
Claims History
Filing previous claims raises your rates. Insurers view you as more likely to file future claims.
Credit Score
Most states allow insurers to use your credit-based insurance score to set premiums. Those with poor credit pay more, on average.
Coverage Limits
The more coverage you buy for personal property and liability, the more your policy costs. But you want adequate protection.
Deductible
Choosing a higher deductible reduces your premiums, but make sure it’s an amount you can afford to pay out of pocket.
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How to Save on Renters Insurance
Fortunately, there are various ways to save on your policy:
- Bundle policies – You can often save up to 15% by bundling renters with auto or life insurance.
- Compare quotes – Rates can vary significantly between insurers. Always shop around.
- Increase deductible – Raising your deductible from $250 to $500 can reduce premiums.
- Improve credit – Maintaining good credit can lower what you pay. Check your reports.
- Add security system – Having a security alarm or cameras may qualify you for a discount of up to 5%.
- Pay annually – Paying your full premium annually rather than monthly can save you 5-10%.
- Use discounts – Take advantage of all the discounts your insurer offers, like paperless billing.
Getting renters insurance quotes from at least 3 providers ensures you find the best rate for your situation. Rent affordably while staying financially protected.
How Much Coverage Should You Buy?
Choosing the right amount of personal property and liability coverage is an important part of the renter’s insurance buying process. Here are some tips for picking ideal coverage limits:
Calculate the Total Value of Possessions – Make a home inventory of all your personal items and their worth. This gives you a total value to insure.
Insure to Value – Your coverage limit should equal the total value of your belongings. If you are underinsured, you won’t be fully reimbursed for losses.
Account for Future Purchases – Add a buffer to your total value, around 10-20%, for future items you may buy. This prevents becoming underinsured over time.
Consider Replacement Cost – If you want to replace damaged items with new ones rather than depreciated ones, buy replacement cost coverage.
Pick a Sufficient Liability Limit – $100,000 is usually the minimum liability limit, but increasing to $300,000 or more is wise for greater protection.
Add Endorsements – Supplemental coverages like scheduled personal property or water backup can fill coverage gaps.
Using these guidelines helps ensure you buy enough renters insurance for your situation. But getting accurate estimates and quotes is also key.
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How to Get Renters Insurance Quotes
Here are some tips for getting renters insurance quotes to find the best rate:
- Shop around – Get quotes from at least three top insurers in your state to compare. Rates can vary significantly.
- Work with an agent – Local independent insurance agents can provide quotes from multiple companies.
- Use quote comparison sites – Websites like Policygenius allow you to get side-by-side quotes easily.
- Look for discounts – Ask each insurer what discounts they offer to maximize potential savings.
- Compare coverage amounts – Make sure you get quotes for the same coverage limits and deductible for accurate comparisons.
- Consider ratings – Choose highly rated insurers using third-party rating sites like AM Best.
- Read reviews – Research customer feedback using sites like ConsumerAffairs to assess insurers.
- Ask about hidden fees – Some insurers may tack on extra fees outside of the standard premium.
Getting multiple renter insurance quotes takes a bit of time upfront, but it ensures you find the optimal rate. Compare quotes carefully before choosing a provider.
To Recap: Is Renters Insurance Worth the Cost?
Renters insurance provides valuable financial protection that can easily pay for itself if you ever need to file a claim. For a relatively small monthly premium, you safeguard yourself against the expensive possibility of property loss, destruction, or liability for injuries.
While no one hopes they ever have to use their renters insurance, unexpected problems can happen. By understanding what renters insurance covers, estimating the right amount of coverage you need, shopping around for the best rates, and utilizing available discounts, you can gain peace of mind knowing your possessions and finances are protected.
Frequently Asked Questions
How much does renter’s insurance cost per month?
On average, renters insurance costs around $15 per month, or $180 per year. But your specific rate depends on your location, coverage amount, deductible, and other factors.
Is the renter’s insurance worth it?
Renter’s insurance can be worth it to protect your personal belongings from theft or damage. It also covers temporary housing costs if you can’t live in your rental and provides liability coverage. For around $15 monthly, it’s relatively inexpensive for the protection provided.
What does renter’s insurance NOT cover?
Renters insurance does not cover damages to the structure of your rental property – only your personal possessions. It also does not cover flood or earthquake damage in a standard policy.
Should I get renter’s insurance if I live with roommates?
Yes, renters insurance is still recommended when living with roommates. It covers your personal property and liability if someone is injured. But damages caused by a roommate may be excluded, so discuss policies.
Does renter’s insurance cover bed bugs?
Bed bugs are typically not covered by a standard renter’s insurance policy. However, you may be able to add bed bug coverage through an endorsement or rider for an additional premium cost.
In another related article, Renters Insurance 101: A Guide to What It Covers and Why You Need It
